Question 1

What is the difference between a recession and a depression?

Accepted Answer

A) A depression is a short-term decrease in economic growth,while a recession lasts several quarters or even years. 
B) Recessions can only occur in developed countries,as lesser developed countries lack the institutions that make recessions possible; depressions can occur in any country. 
C) Depressions are long-term downturns in the business cycle leading to a variety of economic problems,while recessions are merely declines in economic growth and activity. 
D) Recessions are predictable,while depressions usually do not offer any warning. 
A) A depression is a short-term decrease in economic growth,while a recession lasts several quarters or even years. 
B) Recessions can only occur in developed countries,as lesser developed countries lack the institutions that make recessions possible; depressions can occur in any country. 
C) Depressions are long-term downturns in the business cycle leading to a variety of economic problems,while recessions are merely declines in economic growth and activity. 
D) Recessions are predictable,while depressions usually do not offer any warning.

Question 2

Who are the relevant actors and what are their interests with regards to sovereign lending and concessional finance?

Accepted Answer

Answers will vary.The relevant actors ar

Question 3

How did the collapse of the U.S.housing market spark the global financial crisis?

Accepted Answer

A) U.S.banks defaulted on loans given to them by foreign banks to buy real estate. 
B) The U.S.government restricted international investment to focus resources on bailing out home owners. 
C) Many mortgages and associated financial instruments would only be good if housing prices kept increasing. 
D) Many foreigners had bought housing in the United States during the bubble,and they pulled out all of their money when housing prices dropped. 
A) U.S.banks defaulted on loans given to them by foreign banks to buy real estate. 
B) The U.S.government restricted international investment to focus resources on bailing out home owners. 
C) Many mortgages and associated financial instruments would only be good if housing prices kept increasing. 
D) Many foreigners had bought housing in the United States during the bubble,and they pulled out all of their money when housing prices dropped.

Question 4

Which of the following is most likely to be a developing country?

Accepted Answer

A) A country with little land 
B) A country with little unskilled labor 
C) A country with lots of skilled labor 
D) A country with low amounts of capital 
A) A country with little land 
B) A country with little unskilled labor 
C) A country with lots of skilled labor 
D) A country with low amounts of capital

Question 5

How well does the Heckscher-Ohlin theory explain international immigration?

Accepted Answer

Answers will vary.Students may briefly d

Question 6

Why is the International Monetary Fund a controversial international financial institution?

Accepted Answer

Answers will vary.Students may discuss s

Question 7

What is debt forgiveness?

Accepted Answer

A) Capital-rich countries giving debt financing breaks to multinational corporations 
B) Forgiving loans made to poor nations that can no longer afford them 
C) Permitting multinational companies to invest in countries that have substantial foreign debts 
D) Removing the conditionalities attached to International Monetary Fund loans 
A) Capital-rich countries giving debt financing breaks to multinational corporations 
B) Forgiving loans made to poor nations that can no longer afford them 
C) Permitting multinational companies to invest in countries that have substantial foreign debts 
D) Removing the conditionalities attached to International Monetary Fund loans

Question 8

Which of the following is an example of sovereign lending?

Accepted Answer

A) Citicorp lending money to the Brazilian government 
B) The emperor of Japan lending money to the poor 
C) The British Parliament lending money to the British queen 
D) The CEO of Citicorp borrowing money from Citicorp 
A) Citicorp lending money to the Brazilian government 
B) The emperor of Japan lending money to the poor 
C) The British Parliament lending money to the British queen 
D) The CEO of Citicorp borrowing money from Citicorp

Question 9

Which of the following is an example of a portfolio investment?

Accepted Answer

A) A pension fund purchases stock in a Mexican telephone company. 
B) The Campbell Soup Company purchases Godiva Chocolates. 
C) Hershey's,the candy maker,relocates its factories to Mexico and El Salvador. 
D) Walmart purchases a majority of shares of a Thai clothing manufacturer. 
A) A pension fund purchases stock in a Mexican telephone company. 
B) The Campbell Soup Company purchases Godiva Chocolates. 
C) Hershey's,the candy maker,relocates its factories to Mexico and El Salvador. 
D) Walmart purchases a majority of shares of a Thai clothing manufacturer.

Question 10

Which of the following groups is most likely to oppose immigration in a developed country?

Accepted Answer

A) A farmer 
B) A low-skilled worker 
C) A high-skilled worker 
D) A business owner 
A) A farmer 
B) A low-skilled worker 
C) A high-skilled worker 
D) A business owner

Question 11

Why are there conflicts of interest involved in international finance?

Accepted Answer

A) Borrowing countries frequently refuse to pay their debts. 
B) A flood of international capital reduces the domestic savings rate. 
C) Borrowers and lenders disagree over how the benefits from loans and investments should be divided. 
D) The International Monetary Fund is reluctant to manage the problems of heavily indebted countries. 
A) Borrowing countries frequently refuse to pay their debts. 
B) A flood of international capital reduces the domestic savings rate. 
C) Borrowers and lenders disagree over how the benefits from loans and investments should be divided. 
D) The International Monetary Fund is reluctant to manage the problems of heavily indebted countries.

Question 12

Why are the 1980s known in Latin America as the "lost decade"?

Accepted Answer

A) Latin America and other developing regions lost faith in free-trade principles and increased protectionism. 
B) Income and investment in Latin America declined dramatically. 
C) Taxpayers in Europe lost millions of dollars bailing out banks. 
D) Banks in the United States and Europe lost millions of dollars because of bad loans to developing countries. 
A) Latin America and other developing regions lost faith in free-trade principles and increased protectionism. 
B) Income and investment in Latin America declined dramatically. 
C) Taxpayers in Europe lost millions of dollars bailing out banks. 
D) Banks in the United States and Europe lost millions of dollars because of bad loans to developing countries.

Question 13

Which of the following is an example of foreign direct investment?

Accepted Answer

A) Ford Motor Company builds an automobile factory in Argentina. 
B) Citicorp makes a loan to the queen of England. 
C) A Nigerian ship-owner obtains insurance from Lloyd's of London. 
D) Grameen Bank provides microloans to small weaving cooperatives in Bangladesh. 
A) Ford Motor Company builds an automobile factory in Argentina. 
B) Citicorp makes a loan to the queen of England. 
C) A Nigerian ship-owner obtains insurance from Lloyd's of London. 
D) Grameen Bank provides microloans to small weaving cooperatives in Bangladesh.

Question 14

Why was Ireland in debt during the European sovereign debt crisis?

Accepted Answer

A) Their government had borrowed money to invest in economic development. 
B) Their citizens had borrowed money to finance housing and construction projects. 
C) Their government had lent money to Greece and lost it all. 
D) Germany stopped giving them financial aid and lent them money instead. 
A) Their government had borrowed money to invest in economic development. 
B) Their citizens had borrowed money to finance housing and construction projects. 
C) Their government had lent money to Greece and lost it all. 
D) Germany stopped giving them financial aid and lent them money instead.

Question 15

How do debtor-creditor interactions attempt to resolve the conflicting interests between these groups?

Accepted Answer

Answers will vary.Students should discus

Question 16

As an individual person,you are most likely to engage in international finance through:

Accepted Answer

A) portfolio investments. 
B) direct investments. 
C) sovereign lending. 
D) concessional finance. 
A) portfolio investments. 
B) direct investments. 
C) sovereign lending. 
D) concessional finance.

Question 17

Which of the following illustrates how international conditions can affect debtor nations?

Accepted Answer

A) Mexican oil exports decreased,because higher U.S.interest rates precipitated a recession. 
B) The government of Thailand increased interest rates,which led to a recession. 
C) Argentina experienced hyperinflation,because of excessive government spending. 
D) India increased unemployment assistance because of student protests. 
A) Mexican oil exports decreased,because higher U.S.interest rates precipitated a recession. 
B) The government of Thailand increased interest rates,which led to a recession. 
C) Argentina experienced hyperinflation,because of excessive government spending. 
D) India increased unemployment assistance because of student protests.

Question 18

Which of the following has been referred to as being as much a form of aid as of finance?

Accepted Answer

A) Sovereign lending 
B) Concessional finance 
C) Foreign direct investment 
D) Portfolio investment 
A) Sovereign lending 
B) Concessional finance 
C) Foreign direct investment 
D) Portfolio investment

Question 19

Critics of this international institution refer to it as an international loan shark,because it lends to countries in their hour of greatest need but also attaches unpopular conditions as a requirement for receiving a loan.

Accepted Answer

A) World Bank 
B) World Trade Organization 
C) Bank for International Settlements 
D) International Monetary Fund 
A) World Bank 
B) World Trade Organization 
C) Bank for International Settlements 
D) International Monetary Fund

Question 20

Which of the following is an example of a default?

Accepted Answer

A) U.S.corporations evaded taxes by locating headquarters in other countries. 
B) Kuwait exported more oil than the limited quotas agreed upon by oil-exporting states. 
C) The United Kingdom preferred the status quo and kept its own currency instead of adopting the euro. 
D) Brazil announced in 1987 that it would not repay its international loans. 
A) U.S.corporations evaded taxes by locating headquarters in other countries. 
B) Kuwait exported more oil than the limited quotas agreed upon by oil-exporting states. 
C) The United Kingdom preferred the status quo and kept its own currency instead of adopting the euro. 
D) Brazil announced in 1987 that it would not repay its international loans.

What is the difference between a recession and a depression?

Who are the relevant actors and what are their interests with regards to sovereign lending and concessional finance?

How did the collapse of the U.S.housing market spark the global financial crisis?

Which of the following is most likely to be a developing country?

How well does the Heckscher-Ohlin theory explain international immigration?

Why is the International Monetary Fund a controversial international financial institution?

What is debt forgiveness?

Which of the following is an example of sovereign lending?

Which of the following is an example of a portfolio investment?

Which of the following groups is most likely to oppose immigration in a developed country?

Why are there conflicts of interest involved in international finance?

Why are the 1980s known in Latin America as the "lost decade"?

Which of the following is an example of foreign direct investment?

Why was Ireland in debt during the European sovereign debt crisis?

How do debtor-creditor interactions attempt to resolve the conflicting interests between these groups?

As an individual person,you are most likely to engage in international finance through:

Which of the following illustrates how international conditions can affect debtor nations?

Which of the following has been referred to as being as much a form of aid as of finance?

Critics of this international institution refer to it as an international loan shark,because it lends to countries in their hour of greatest need but also attaches unpopular conditions as a requirement for receiving a loan.

Which of the following is an example of a default?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

Filters

Exam 8: International Financial Relations

What is the difference between a recession and a depression?

Who are the relevant actors and what are their interests with regards to sovereign lending and concessional finance?

How did the collapse of the U.S.housing market spark the global financial crisis?

Which of the following is most likely to be a developing country?

How well does the Heckscher-Ohlin theory explain international immigration?

Why is the International Monetary Fund a controversial international financial institution?

What is debt forgiveness?

Which of the following is an example of sovereign lending?

Which of the following is an example of a portfolio investment?

Which of the following groups is most likely to oppose immigration in a developed country?

Why are there conflicts of interest involved in international finance?

Why are the 1980s known in Latin America as the "lost decade"?

Which of the following is an example of foreign direct investment?

Why was Ireland in debt during the European sovereign debt crisis?

How do debtor-creditor interactions attempt to resolve the conflicting interests between these groups?

As an individual person,you are most likely to engage in international finance through:

Which of the following illustrates how international conditions can affect debtor nations?

Which of the following has been referred to as being as much a form of aid as of finance?

Critics of this international institution refer to it as an international loan shark,because it lends to countries in their hour of greatest need but also attaches unpopular conditions as a requirement for receiving a loan.

Which of the following is an example of a default?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

Filters